Category Archives: Trade and Industry

Could food, medicines and petrol run out in the event of a no deal scenario? The short answer is yes, absolutely. It only takes a small disruption to sophisticated supply chains for things to grind to a halt.

Leaving the EU without a deal means becoming a third country overnight. The status of having no formal trade relations. The UK would not exist as an entity anywhere inside the EU legal framework. We would be subject to third country customs controls without any of the single market product approvals or valid certification.

If you don’t have the valid paperwork for your goods to circulate freely in the market then you have to find a named importer and have your products re-certified inside the EU – at considerable cost. Some classes of foodstuffs must be diverted to border inspection posts.

So that means if we go from single market members to being a third country then overnight the ports back up, Operation Stack goes into effect and lorries are sat on the motorway for days. That takes trucks and drivers out of circulation. The normal flow of supply chains is interrupted.

Remember this works both ways for trucks coming in and out of the country. Meanwhile companies by law have to file declarations which our current system is not designed to cope with. For some suppliers there will be no point in trucks even leaving the depot.

With roads jammed with trucks, supply chains collapsing very rapidly we see rumours of shortages which leads to panic buying. It happens every time we get even a dusting of snow where Tesco runs out of bread and loo roll even if there is no actual shortage.

Those of you old enough to remember the fuel strikes will remember how perilously close the country came to grinding to a complete halt. This would be the same with fuel lorries trapped in traffic. The way the EU legal system works is that if there is no paperwork and there’s no tick in the box then there is no trade.

All the while keep in mind that we will have been ejected from the treaty system governing airways and flight-plans, and without legally valid flight-plans then aircraft are grounded. All rights in the EU airline market are rescinded.

There is nothing in WTO rules that compels the EU to breach its own rules even in an emergency. Driving licences wouldn’t be valid, nor would qualifications so there would be no mutual recognition of conformity assessment. Veterinary inspectors, drivers and pilots would be disqualified.

This is not “remoaner” speculation. Our own findings at The Leave Alliance paint a pretty grim picture of the WTO Option. This is a simple matter of law. If we have no formal relations with the EU then trade simply does not happen.

Longer term, as a third country, the costs of delays, inspections and re-registration make UK business uncompetitive in the EU. Costs go up, contracts are lost, deadlines are missed, tariffs kick in. This is what it means to be outside the European Economic Area.

All of this has been made clear in the EU’s Notices to Stakeholders. These are formal notifications based on the current law. This is no scaremongering or diplomatic threat. This is the business end of the EU.

We don’t know how long it would take to get the trucks rolling again. We’d have to revert to paper declarations because the current IT is not set to cope with the volumes of declarations nor is it mapped to a third country regime.

There are mid-term fixes in the form of bilateral agreements but these would take time and since the UK will have left without paying, the EU would not be in a rush to do us any favours. It will take years to rebuild a functioning customs and regulatory system.

In the meantime businesses cannot afford to wait. Suppliers to EU assembly lines will have no choice but to relocate. Delays will naturally mean production slowdowns and all the secondary suppliers will take the hit.

Trade is more than just movement of goods and there are far bigger worries than tariffs. By leaving without a deal all the otherwise manageable problems of exit happen overnight without the capacity to cope with them. We would be in very serious trouble.

Frictionless trade does not happen by accident. It is the product of thirty years of technical and regulatory collaboration and the result of several strands of agreements on everything from fishing to aviation. Without formal status in the system then UK trade collapses.

Additionally, it’s not just the immediate effects we must consider. It’s the ripple effect that passes through every supply chain, every regulatory system and anything that depends on licencing, certification and approvals. Nearly all of it has an EU dimension.

Without alternative arrangements a lot of our insurances become invalid, contracts voided and work will grind to a halt an major infrastructure programmes. It will simply be illegal to operate without valid insurances.

So deep and comprehensive is EU integration that there is no escaping the regulatory gravity of the EU without serious and lasting harm. It is therefore not remotely realistic to suggest that things can function without a formal framework for trade. Leaving without a deal simply is not an option.

Lord Kerr of Kinlochard, speaking in the debate preceding the vote, said “I do not recall at the time of the referendum any debate about a customs union.” He was perfectly correct in saying this. Staying in the customs union is such a daft idea that no one felt the need to bring the subject up. As Dr Richard North points out, “A customs union does not in any way eliminate a border, as we see with the borders between Turkey and EU Member States.” it is therefore no help in solving the Irish border question.

He also makes the point that, as usual, the Press are all over the place in their reporting of yesterday’s vote. It was not a “big defeat” for the government as the amendment supported by 348 peers only forced “the government to explain what it has done to pursue remaining in a customs union”. In other words, suppose that some degree of light finally dawned and the government realised that there was no point in remaining in a customs union, all this “big defeat” would require them to do would be to say to their Lordships “not much”. Hardly the sabotaging of Brexit which the headlines seem to suggest.

For people looking for a way to keep the flow of trade moving in the immediate post-Brexit period, both across the Irish border and through the Channel Tunnel, it makes for more sense to visit the invisible border between Sweden and Norway rather than Turkey’s version of “Operation Stack” at Kapikule on its border with EU member state Bulgaria. Norway is not in the customs union; Turkey is. Need one say any more?

The Government should finally lay to rest all this nonsense about a customs union. It should also abandon the current plans for a transitional deal. Further evidence of its inadequacies emerged yesterday when Cecilia Malmström, the EU’s trade commissioner, said that the UK would no longer be part of trade agreements negotiated by the EU with third countries once we leave. Re-joining EFTA as an interim arrangement would not only solve the Irish border issue but would address the issue of our trade with countries like South Korea and Mexico as EFTA has negotiated free trade agreements with virtually all the countries with which the EU has FTAs.

It remains a mystery to many observers why this sensible option isn’t being pursued. For all its well-known faults as a long-term relationship, as a stopgap arrangement it is far better than the arrangement currently being discussed with the EU. Adopting it would put to bed a number of issues which should have been dealt with well before now and thus enable the Brexit debate to move on after being stuck in the same groove for far too long

With Parliament still in the Easter recess, things have been a bit quieter than usual on the Brexit front. However, the well-supported fishing protests last Sunday suggest that we are going to be entering a period in which the Government will face ever-mounting pressure to try a different approach to securing some sort of workable short-term post Brexit arrangement.

The long term is not looking promising either. Given how readily Mrs May and David Davis rolled over, what is the likelihood of their resisting demands from Michel Barnier that the UK sign a “non-regression” clause in any long-term agreement, which would force the UK not to undercut EU standards on tax, health and the environment to poach investments. He has also insisted that access for EU fishing vessels must be included in any long-term deal. The “environment” issue is a red herring as many EU environmental laws owe their existence to UK influence, but why should we not determine who fishes in our waters? Why should we be denied the freedom to cut tax? The state in the UK is horrifically bloated, as in most other Western nations. It needs to be shrunk drastically and were this to be undertaken, taxes would inevitably undercut those in many EU member states.

Going back to the transitional arrangements, a report from the House of Commons Brexit Committee has confirmed that if a “deep and special partnership” with the EU proved unsuccessful, EEA/Efta membership was an alternative that could be implemented quickly. Although the Committee is looking at EEA/Efta as a long-term solution (which it isn’t) it would be a better alternative than the current proposals for the short term, which poses the question as to why Mrs May and her team are pursuing such a damaging alternative. Maybe they still believe that it’s worth enduring 21 months of humiliation because there will be a marvellous deal at the end – a hope which is unlikely to be fulfilled. Barnier’s comments make it clear that he wants to deny us as much long-term freedom as possible.

A number of Commonwealth countries have been discussing a future trade relationship with the EU. The Canadian Prime Minister Justin Trudeau has said that it would be “fairly easy” to negotiate “an improved approach on trade between Canada and the UK” after Brexit. The same article claimed that India is becoming less enthusiastic, no doubt due to the recent statement by Theresa May that she still intended to reduce annual net UK migration to less than 100,000, meaning that India’s desire for more of its citizens to come over here as part of a new trade deal is unlikely to be fulfilled. Australia is also keen to start negotiations with the UK on trade, but pointed out that if we stayed in the EU’s customs union after Brexit, we wold become “irrelevant”.

Meanwhile, disgruntled remoaners are still seeking to over turn Brexit by demanding a second referendum. For all her failings in other areas of Brexit, at least Mrs May is standing firm on this. “Regardless of whether they backed Leave or Remain, most people are tired of hearing the same old divisive arguments from the referendum campaign, and just want us to get on with the task of making Brexit a success. And they’re right to think that. The people of this country voted to leave the EU and, as Prime Minister, it’s my job to make that happen.” she said in a recent speech to mark one year until Brexit day.

Mrs May is most definitely right in claiming that most people have had enough of Brexit controversy. Claims that some 44% of voters want a second referendum do not tally with real-life experience. Given that the poll was conducted by a pro-remain group, Best for Britain, a healthy degree of scepticism is justified. Mrs May has the support of Jeremy Corbyn in opposing a second referendum and it is doubtful whether those activists on both sides of the argument who spoke in debate after debate, criss-crossing the country and having to suspend anything resembling a normal life for three months would want to go through it again.

The clamour is coming from those who wouldn’t have to do the donkey work. The latest addition to the ranks of these good-for nothings is David Miliband, who called Brexit “the humiliation of Britain.” Well, Mrs May does seem to be trying to do this at the moment, but a decent Brexit would be the absolute opposite – a chance to stand tall as a sovereign nation once again. there’s nothing humiliating about this. One after another, the fears stoked up by remoaners are being debunked. The UK economy has performed well since the vote and only today, Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, stated that despite attempts to lure parts of the finance industry to Paris or Frankfurt, London would remain Europe’s financial hub after Brexit. A mass exodus from the City was always a concern during the referendum campaign, but such fears are unfounded.

In many ways, a healthy debate on how we leave – i.e., the relative merits of the current transitional proposal versus EEA/Efta as a holding position will take the wind out of the remoaners’ sails and would cut their media exposure in favour of more important issues. However, one cannot overstate the importance of winning this debate. Brexit must mean Brexit (to quote Mrs May). Surrendering to the EU’s demands for a transitional deal would prevent us fully achieving the separation for which we voted in June 2016. This must not happen.

Mrs May and Mr Davis’ oft repeated aspiration for ‘frictionless’ trade with the European Union (EU) via a free trade agreement (FTA) and mutual recognition of standards will in reality consign the United Kingdom to being a permanent EU vassal state. Brexit will be in name only, with “stay, pay, obey without a say” being the outcome of their mishandling the Brexit negotiations. The transition agreement, which turns the UK into an EU vassal state thanks to completely caving in to unreasonable demands by the EU, is a forerunner of even worse things to come. The transition deal (partially agreed, although a long way from being ratified) is vastly inferior to the deal which they could have obtained, but rejected out of hand as far back as Mrs May’s Lancaster House speech 17th January 2017. We could have retained our membership of the Single Market (and wider European Economic Area, EEA) through re-joining, even temporarily, The European Free Trade Association, EFTA. This alternative, also known as the ‘Norway Option’, could have delivered practically ‘frictionless’ trade and a soft border on the isle of Ireland.

At the heart of Mrs May and Mr Davis’ highly risky, far-fetched and delusional approach to Brexit is a failure to understand the nature of the EU, the European Economic Area (EEA), EFTA’s working relationship with the EEA including the EEA Agreement, mutual recognition of standards and how world trade works. They make the most basic mistakes and repeat factually incorrect or incomplete statements to support their contradictory desire to leave the Single Market while retaining the same level of market access through an FTA. They appear unwilling to take cognisance of readily available facts that completely disprove their fatuous mantras.

The details of what will happen after the UK leaves the EU (and the EEA) are there for anyone to see on the EU’s dedicated website – especially in the increasing number of “Notices to Stakeholder”s under Brexit preparedness) It makes somewhat chilling reading. There is nothing equivalent on the Department for (not) Exiting the European Union’s website. Presumably either they haven’t done this vital work or have chosen not to share it – a truth too awful to tell?

Upon leaving the EU and the EEA we would become a ‘third’ country. We would then be subject to different requirements by the EU in order, at best, to manage the risks (to consumers and others) of doing business with us (or any other ‘third country’ outside the Single Market or EEA) and, at worst, to erect protectionist trade barriers in favour of domestic EU enterprises. From the EU’s perspective, they will not grant concessions to ‘third’ country suppliers outside their control which are not enjoyed by EU domestic suppliers, especially when these could increase risks or create an ‘unfair’ competitive advantage. The EU also has to treat the UK the same as any other ‘third’ country in order to comply with World Trade Organisation (WTO) agreed requirements or principles.

For the EU, mutual recognition of standards (which differ from theirs) has limited application, since it is not their preferred choice where harmonised standards (in their widest context) exist. In any case, there is the practical complexity and increased cost of demonstrating equivalence and compatibility, which can be far from straightforward and unacceptable to consumers and users. To take a simple illustration, traffic lights using green on top for ‘stop’ and red underneath for ‘go’ certainly provides equivalent functionality but are far from compatible and acceptable. Also test values from subtly different tests may mean a product is (theoretically) less safe rendering it unacceptable or requiring expensive (or impractical) re-design, which in turn may invalidate other test results and/or existing certification/approvals. (See also the Fallacy of Easy Mutual Recognition of Standards).

The EFTA/EEA option is not perfect, but is far more favourable to the UK’s interests than the transitional deal on offer or indeed, to what will eventually emerge as Mrs May’s FTA and ‘deep and special relationship’. Norway participates in the EEA through membership of EFTA. Actually it only implements EU legislation necessary for functioning of the EEA, which at most constitutes around 25% of the total EU acquis or system of laws. More than 90% of these EEA related laws reportedly originate in global bodies, meaning the UK would need to implement them anyway for global trade, unless we leave the World Trade Organisation (WTO), et al. Also the EFTA route to EEA membership gives members outside the EU a say in EU legislation affecting the EEA, is largely free (although ‘voluntarily’ Norway does contribute to regional development funds) and is outside the jurisdiction of the European Court of Justice (ECJ). What is more, EFTA members make their own trade agreements with other countries.

Contrary to statements by M. Barnier and Mrs May about the four indivisible freedoms, EFTA/EEA membership contains the facility to control immigration. Two members of EFTA have unilaterally invoked Article 112 (the Safeguard Measures) of the EEA Agreement to restrict free movement – Liechtenstein for people and Iceland for capital. The UK could do so too if we retain membership of the EEA by re-joining EFTA. Ironically, Articles 112 and 113 of the EEA agreement, which Mrs May rejects, are reproduced closely by the EU in their draft Withdrawal Agreement, Article 13 (Protocols NI), allowing the EU unilaterally to restrict freedom of movement (including immigration into the EU from the UK).

Continuing membership of the EEA solves the problem of maintaining a soft border in Ireland between the Irish Republic and Northern Ireland, thus avoiding a hard border between Northern Ireland and the rest of the UK (something Mrs May has ruled out, for the moment). It also gives us full control of fishing in our Exclusive Economic Zone. The EEA agreement (for EFTA members) can be adapted to suit their interests. Thus the UK (within EFTA) could get a bespoke version. So we could ‘imitate, adapt and improve’ on the existing EEA agreement to suit our needs rather than follow an insular and amateurish effort to ‘re-invent the FTA wheel in a few months’ that isn’t going anywhere.

From the beginning, the EU negotiators completely dominated the Brexit negotiations. It was inevitable then that negotiating concessions (or cave-ins) would be made by weak, dithering and clueless Mrs May and Mr Davis to strong, decisive and professional M. Barnier and his team. Comparing the EU’s draft Withdrawal Agreement with the text agreed by the UK shows just how much the increasingly uncompromising EU is getting its way. Worse still, the EU is getting away with demands that are over and above those necessary for trade, with more already in the pipeline (such as fishing, defence, defence procurement, locking UK into EU budgets etc.). If you thought the Transitional Deal was bad, wait until you see the final withdrawal agreement and the FTA.

Mrs May and Mr Davis are opening a Pandora’s Box of complexity, confusion and chaos by advocating the Mutual Recognition of Standards to achieve ‘frictionless’ trade post Brexit. They appear not even to know the basics, being unwilling or unable to clarify what they mean by ‘standards’, and consequently fail to acknowledge the many subtleties and ‘show-stopping’ problems involved.

Mrs May, in her Our Future Partnership speech at the Mansion House on 2nd March 2018, went no further than to express banal generalities about ‘standards’:

“The UK will need to make a strong commitment that its regulatory standards will remain as high as the EU’s. That commitment, in practice, will mean that UK and EU regulatory standards will remain substantially similar in the future.

Many of these regulatory standards are themselves underpinned by international standards set by non-EU bodies of which we will remain a member – such as the UN Economic Commission for Europe, which sets vehicle safety standards.”

“Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles to guide them.

And the certainty that Britain’s plan — its blueprint for life outside of the European Union — is a race to the top in global standards.

And not a regression from the high standards we have now.”

When they talk about standards, what do they mean? Parameters (for safety, performance, environmental impact etc.) and levels of performance against them? Highly prescriptive laws and regulations covering whatever bureaucrats can think of? Standards published by the International Standards Organisation (ISO) or the European Centre for Standardisation (CEN) or the British Standards Institute (BSI)? Organisations that have statutory duties (under UK and/or EU law) to assess conformity or enforce compliance? All of these? – or something completely different?

Whilst clarity and precision are prerequisites for any published standard or specification, Mrs May appears to believe she has already been clear in setting out what she wants relating to mutual recognition of standards. In her statement to the Commons 5th March 2018 Mrs May concluded:

“My message to our friends in Europe is clear. You asked us to set out what we want in more detail. We have done that.”

Unfortunately for Mrs May and Mr Davis, they are not being at all clear what they want and show no indication of even trying to understand the subject of mutual recognition of standards, which they are so convinced they can get the EU to adopt. Furthermore, the arrangements they appear to be seeking conflicts with how the EU uses ‘standards’ and shows their ignorance of how the EU and Single Market functions. Mutual recognition, where it exists at all, is being superseded by harmonised standards, processes, procedures, regulation and market surveillance, within a centralised legal and bureaucratic framework. Mutual recognition is the laborious, slow exception, not the fast rule.

The European Union (EU) is seeking to move towards the legally mandated use, without deviation, of harmonised requirements and published European Specifications and Standards, for instance through its New Approach Directives (which cover many products). These Directives (which are EU law) contain ‘essential requirements’ covering safety, reliability and availability, health, environmental protection, technical compatibility and accessibility. In turn, these may mandate requirements contained in a dated version of a ‘European specification’ which can be a common technical specification, a European technical approval or a national standard transposing a European standard. A common technical specification is one which has been laid down in accordance with a procedure recognised by the Member States which has been published in the Official Journal of the European Union.

A Directive will normally only refer to a part (i.e., specific clauses) of a wider ‘European specification’. European Standards can contain national deviations or special national conditions, but these are then disallowed in the Directive as part of the goal of achieving harmonised requirements. Derogations (or variations) against requirements in Directives are discouraged requiring the granting of unique or special permission by the relevant authority which increasingly is an arm of the European Commission. Generally national standards (or rules) can be used only where permitted by a Directive or in the absence of an applicable European specification.

There are published International, European and British standards for materials, components and finished products, processes, systems, management subjects etc. There are also more fundamental ones such as Basic Safety Publications which are intended for use by technical committees in the preparation of standards. Organisations from the UK participate in drafting committees in the ISO, CEN and BSI et al to produce published standards. This involvement will be unaffected by Brexit.

There is also considerable interchange between international standards (ISO, IEC, EN), often with common text or even numbering and cross referencing of requirements. Also standards first produced by national bodies (such as BSI) can end up being adopted internationally as ISO or European Standards, with some re-drafting. Generally, International Standards (from ISO, IEC, CEN, CENELEC etc.) are well refined whilst specified requirements in Directives can contain grammatical errors and be mixed with information, thus making them more difficult to follow.

Harmonising standards to produce a single internationally accepted standard and requirements at European or global level makes considerable sense for quality, safety, technical or functional compatibility, production and testing etc. Often, for historical and economic reasons, this is far from being immediately practicable. Perhaps the simplest illustration is paper sizes where the ISO series (which originated in Germany) is not followed in North America leading to endless document reformatting.

Knowledge is power, so it is very worrying when our senior politicians repeatedly display – through obvious errors and factually incorrect statements – a lack of understanding of the European Union (EU) and how it functions. These errors must inevitably undermine any chance of negotiating a satisfactory outcome for the United Kingdom and time is running out.

For example, the Norway model, where we would stay in the single market, would mean having to implement new EU legislation automatically and in its entirety – and would also mean continued free movement.

Norway participates in the European Economic Area (EEA) through membership of the European Free Trade Association (EFTA). Actually it only implements EU legislation necessary for functioning of the EEA, which at most constitutes around 25% of the total EU acquis (or system of laws). More than 90% of these EEA related laws reportedly originate in global bodies anyway, meaning that even if we left the single market, the UK would still need to abide by them for global trade unless we decided to leave the World Trade Organisation (WTO)as well. Various members of EFTA have unilaterally invoked Article 112 (the Safeguard Measures) of the EEA Agreement to restrict free movement. In the case of Liechtenstein, it was free movement of people whereas for Iceland it was free movement of capital. The UK could do the same if retains membership of the EEA by re-joining EFTA. The “four freedoms” are NOT indivisble for non-EU countries, whatever M. Barnier may say. Ironically Articles 112 and 113, which Mrs May fails to understand and rejects, are reproduced closely by the EU in their draft Withdrawal Agreement, Article 13, allowing the EU unilaterally to restrict freedom of movement including immigration into the EU from the UK.

The European Union itself has a number of mutual recognition agreements with a variety of countries from Switzerland to Canada to South Korea. These cover a huge array of products — toys, automotives, electronics, medical devices — and many many more. A crucial part of any such agreement is the ability for both sides to trust each other’s regulations and the institutions that enforce them. With a robust and independent arbitration mechanism. Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles to guide them.

He appears unaware of the EU’s overall longstanding approach for the said huge array of products and didn’t quote any examples of regulations, institutions and authorities where his ideas are actually working. So there is a bit of guesswork here as to what he intended and how well this fits in with the EU’s position, what is enshrined in EU law, and consequently how likely his (and Mrs May’s) new panacea for ‘frictionless’ trade (mutual recognition of standards)is to be realised.

The EU would seem to prefer an orderly Brexit, judging by its website, although it appears to have realised that even a smooth Brexit will be highly disorderly for many organisations with the UK reverting to “third country” status. A seamless Brexit is looking increasingly unlikely as our government’s failure to grasp the rigidity of the EU’s position has left it in denial of the consequences for trade. After many years of ceding powers to Brussels, we have ended up with a Prime Minister and chief negotiator who are completely out of their depth, while the Department for (not) Exiting the European Union lacks essential competence. It is instructive to look at what serious items are missing from Mrs May and Mr Davis’s speeches rather than what is said which is often largely a collection of wishful thinking, anecdotes, regurgitated vacuous clichés and irrelevant boiler-plating.

The serious items that should feature include: an outline of how the EU is understood to manage trade (useful background); full specifics on what exactly ‘frictionless’ trade means quoting specific examples – named products, commercial activities and enterprises; the barriers that will exist (taking cognisance of EU requirements, such as here); how in practice these will addressed in ways acceptable to existing EU ways of working (in other words, how, when necessary, will we still be compliant with EU laws, regulatory practices and organisational frameworks); cost breakdowns; how payment for extra costs incurred will be addressed; a planned timetable; risk analyses and management arrangements; outlines of work to date including feasibility studies and assumptions; measures for functional integration across interfaces; signposts to further work and information. Interfaces tend to cause problems and successful integration between, for example, different countries, standards, organisations, market surveillancepractices, etc. would need particular practical attention.

If we are to see a seamless departure from the EU – and indeed, until we have the necessary expertise, it is logical to seek a stopgap, time-limited arrangement which will retain near ‘frictionless’ access for trade whilst ensuring that we truly exit the political structures of the EU on 29th March 2019and largely cease to contribute to its politically motivated budget. Remaining within the EEA via re-joining EFTA is the only viable option. To date we have not received an explanation from Mrs May why she rejected this route nor why she has shown no interest in using the flexibility in the EEA agreement to get a bespoke deal. Her incorrect statement in her speech (quoted above) is nowhere near an explanation.

In contrast to a practical and relatively straightforward temporary solution to buy time, we hear instead a great deal of waffle about a long-term Free Trade Agreement (FTA) like no other. Mrs May, Mr Davis et al are set on maintaining ‘frictionless’ trade by pressurising the EU to bend its existing rules (primarily incorporated into EU Laws and European Court of Justice, ECJ judgments), alter its longstanding direction of travel and at the same time pay all the extra costs (to the EU) of such a deal. This arrangement is one which the EU can, and most likely will, refuse.